Wk 1 Economics Lecture PDF

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Wk 1 Economics Lecture Economics- Scarcity problem-insufficient resources (limited) to satisfy (unlimited) needs/preferences or wants. Economics as social sciences = the study of activities arising from the problem of scarcity or The study of the way rational economic agents allocates scarce means to achieve the competing ends. The economic person: The agent choosing between the ends (amongst scarcity)- assured to be rational choosing ends that optimise personal utility (ie. Welfare): homo economics. Assumption: Economics man always acts in own best interest (no one else’s) when allocating resources to competing ends, seeking to optimise personal utility (personal cost/benefits. Opportunity costs- economic man recognises that, security means every optimising decisions involves an opportunity lost. Of any action is the next best alternative that is forgone. Full opportunity cost of an action are often neglected. The production possibility frontier- illustrate allocation of scare resources to competing ends (and the associate idea of the opportunity cost. Production- conversion of the factors of productions/ inputs (rersources) into goods and services/ outputs. Inputs-lands, labour and capital. Production possibility (amount produced is limited by the amount of inputs available and the state of technology= certain production...